What's an annual plan?

An annual plan is an organization's financial plan for the fiscal year. This year, as in the three preceding years, the annual plan is rooted in the five-year (2010-15) Wikimedia Foundation strategy, which was developed collaboratively on the Strategy Wiki in 2009-10. That work, together with recent efforts to narrow the focus of Wikimedia’s programmatic work, formed the basis of this plan, which was created by the Wikimedia Foundation's senior leadership based on guidance given to it by the Board of Trustees, with support from the staff of the Wikimedia Foundation.

In addition to reflecting only unrestricted spending, the operating budget is primarily a cash-basis budget, so it doesn't include in-kind revenue and expenses, nor non-cash expenses such as depreciation. This is fairly common for budgeting purposes. Of course, our annual audited financial statements do reflect restricted funding as well as non-cash revenue and expenses, in order to conform to generally accepted accounting principles.

What is the current state of the 2013-14 Annual Plan?

The 2013-14 plan was approved by the Board of Trustees on June 28, 2013. The 2013-14 fiscal year began 1 July 2013 and ends 30 June 2014.

As a reader of the Wikimedia projects, how will my experience change as a result of this plan?

The Wikimedia Foundation’s number one priority is growing Wikimedia’s volunteer community in size and diversity (see below). The underlying hypothesis is that the diversity of knowledge that Wikimedia projects can offer reflects the diversity of Wikimedia’s community. Retaining our existing community of volunteers is as important as bringing in missing voices, so increasing diversity requires an increase in the overall size of the population of contributors; it means taking contribution to Wikimedia projects from a niche activity into the mainstream of society.

Indeed, one of the premises of Wikimedia projects is that the distinction between “reader” and “contributor” should be only a weak one: Every person on the planet should be empowered to share in the sum of all human knowledge, which refers to both learning from others, and contributing where possible.

With that said, there are a number of efforts supported in the 2013-14 Plan, some explained in detail in the list of high priority programs, which will affect the reader experience more directly:

Most notably, we are continuing to invest in Wikipedia Zero, a program designed to eliminate data charges for accessing Wikipedia on mobile phones in developing countries. For people with limited disposable income, data charges can make the defining difference between treating a service like Wikipedia as a luxury, or using it as an essential learning resource.As of May 2013, we have negotiated agreements with mobile operators that will make Wikipedia available for free for 410 million mobile users in 37 countries. We plan to continue to expand the program and increase awareness of its availability.

We are building a new engineering team focused on multimedia. The mandate of this team is partially the improvement of tools for contributing and curating media files (sound, images, video, etc.), but also to give media greater prominence in the Wikimedia reader experience: making it easier to immerse yourself in the photographs and videos that support a given Wikipedia article, for example. We have already made significant improvements in the experience of watching video on Wikimedia projects in the last year, and expect to continue to do so.

We are continuing to improve the user experience on mobile devices. In the last year, we made significant improvements to the mobile site, especially formatting of complex articles, display of tables and citations, etc. We will continue to improve the mobile reader experience, and put increased emphasis on a user experience that is optimized for tablets as well.

We will continue to improve site performance and reliability. In the last year, we completed transition to our new primary data-center in Ashburn, Virginia, and we are building out a secondary caching-center location in San Francisco, California. We are also aiming to finally decommission our current secondary data-center location in Tampa, Florida in favor of a new location that can continually serve as a reliable failover in case of any outages in our Ashburn location. In combination, these investments help ensure that readers are served cached copies with high performance whenever possible, and protect us against major outages (e.g. disaster-related) that could affect both readers and contributors.

Our grants to Wikimedia and mission-aligned organizations, groups and individuals will continue to support different forms of outreach and support to readers across the world, including (as an example) through offline versions of Wikipedia. In particular, we will continue to invest resources in the Global South, through grants and community support in high potential geographies and languages.

As a volunteer contributing to Wikimedia projects, how will my experience change as a result of this plan?

Much of our engineering effort is focused on modernizing the experience of contributing to Wikimedia projects, and helping guide new contributors towards a rewarding and productive experience. In 2013-14, this will include:

The continuing rollout of VisualEditor as the default editing environment to remaining Wikimedia projects and languages, including continued bug fixes, feature and performance improvements, and the beginnings of support for real-time collaboration (editing the same page with multiple users at the same time).

The development of Flow, a discussion and workflow engine. Discussion (talk) pages are the backbone of collaboration in Wikimedia projects, and simplifying participation in any conversation on our projects is an important counterpart to improving the editing experience. In addition to the discussion experience, Flow will provide the structural support for simplifying many workflows that have evolved over the years in Wikimedia projects which depend on copy and pasting cryptic markup from one page to another. We anticipate that Flow will not only make our projects easier to use, but will significantly reduce the workload of our volunteer community.

Continued support for contributing via mobile. In 2012-13, we built the first mobile photo upload functionality for apps and the mobile web, exceeding our target of gaining at least 1,000 mobile uploaders per month. We also prototyped the first-ever mobile editing features. In 2013-14, we will continue to expand our offerings in this area, while continuing work on mobile editing and “microtasks”, optimized workflows for small but useful tasks that can easily be performed on smartphones and tablets.

Continued A/B testing and optimization of the new contributor funnel. Through small, targeted improvements, we continually look for ways to help more users enter the funnel of becoming contributors, and to help them discover useful ways in which they can contribute.

Improved integration of multimedia contribution into the editing workflow, and improved curation (patrolling, tagging, etc.) features for multimedia files.

Continued improvements to Wikimedia Labs as an environment where volunteers can build technical features and infrastructure improvements of varying complexity.

In addition, we will continue to ramp up our support to individual contributors through grants, both directly in the form of grants to individuals for projects, events and travel, as well as through our grants to Wikimedia organizations and groups who support individual contributors. In particular, our Individual Engagement Grants (IEG) program, piloted last year, will offer up to 30 grants this year for individual volunteers and small teams for projects with online impact. In addition, we continue to encourage individual volunteers to actively participate in non-Wikimedia events through our Participation Support program.

If I am involved with a Wikimedia chapter or other entity contributing to the Wikimedia movement, how will my experience change as a result of this plan?

All grant programs for chapters and other entities in place in 2012-13 are still in place with this annual plan. Budgeted funding has been changed to better match the projected funding needs of the Funds Dissemination Committee (FDC) and the Wikimedia Grants Program with the potential needs in the movement. In particular, we are responding to a need to have more project funding with some administrative support available to entities by nearly doubling the project grants budget (i.e. the Wikimedia Grants Program). The first quarter of the new fiscal year will be spent in improving the processes for both annual plan grants (allocated through the FDC) and project/event grants (allocated with the advice of the Grants Advisory Committee or GAC) so that chapters and other entities can make well-informed decisions on which form of grant might suit their context and needs better. These improvements - based on our learning from the launch of the FDC and IEG grants in the past year - will include a potential rename of some of the grants programs to better reflect their purpose, guidelines to help strengthen proposals, as well as greater clarity on the criteria being used by the grants committees and WMF to assess these grants.

How is this plan different from previous year’s plans?

At the beginning of the 2012-13 Fiscal Year, the Wikimedia Foundation’s Board of Trustees requested “an assessment of the Foundation's programs and strategic priorities ... [to] present options for adjusting the annual plan, potentially reducing or eliminating lower-priority programs and capabilities.” This resulted in the Executive Director’s recommendations, adopted by the Board, to narrow the focus of the Wikimedia Foundation’s programmatic work to two key areas: engineering/product development, and grantmaking.

Consistent with this narrowed focus, the 2013-14 Annual Plan reflects the intended division of the currently combined Engineering/Product department into Engineering and Product & Strategy, each with dedicated leadership. This will ensure that both areas can receive full leadership attention, and increase the overall representation of WMF’s largest programmatic area of work at the senior leadership level.

Also as a result of narrowing focus, the “Global Development” department is now two departments: “Grantmaking” and “Program Development”. Grantmaking covers all the former catalyst programs, along with the Funds Dissemination Committee, the Wikimedia Grants Program, Individual Engagement Grants, Participation Support and support for Wikimania. It also leads the organization’s Global South strategy and facilitates conversations around the Gender Gap. Program Development is a new department which in addition to capturing our movement wide learnings on programs, through work on program evaluation and design, is also responsible for the Global Education Program and Wikipedia Zero.

In addition, this is the first year in which budgeted revenues are less than the prior fiscal year projections and we are not planning for a contribution to the reserve. Thanks to increased fundraising effectiveness, the Wikimedia Foundation was able to raise $5 million of revenue beyond plan to grow the reserve in 2012-13. This is also a plan which has 8% of the growth in budget tied to $2.5 million in one time projects, such as strengthening the trademark portfolio, facilities improvements, and the replacement of our current secondary data-center.

What are the 2013-14 plan targets?

What did the Wikimedia Foundation accomplish in 2012-13?

How did 2012-13 play out from a financial perspective?

From a financial perspective, 2012-13 was an excellent year for the Wikimedia Foundation. In 2012-13 our plan was to increase revenue to $46.1 million from a revenue projection in 2011-12 of $34.8 million, for an increase of 32%. We have exceeded this goal, with projected revenue for 2012-13 of $50.9 million. This projected revenue number includes $5M for the reserve, which was raised this fiscal year instead of next fiscal year.

In 2012-13, the Wikimedia Foundation planned to increase spending 33% from 2011-12 projections to $42.1 million. The goal was to fund the FDC grants process and build additional capacity in Engineering. Our actual spending is projected to be under budget due to lower than planned grantmaking via the FDC process, cost savings from Narrowing Focus, and lower than planned hiring in Product and Engineering.

How did 2012-13 play out from a fundraising perspective?

The fundraiser was done in two parts with an end-of-2012 fundraiser focused on eight countries (Australia, Canada, France, Germany, New Zealand, Switzerland, the United Kingdom, and the United States) and a second fundraiser in March 2013 that included over 50 languages and in which the largest donor countries turned out to be Japan, Italy, Russia, the Netherlands, Spain and India. The end-of-2012 fundraiser was by far our shortest to date. We showed banners for nine days and then experimented with a new feature: showing banners only to users who hadn’t seen them before, and only for a limited number of views (usually one or two). By comparison, in 2011 the fundraiser showed banners to all readers in nearly every country in the world for 46 days.

The decision to split the fundraiser into two parts was deliberate. We wanted to use the end-of-year fundraiser to experiment with new types of messaging and banners, primarily in English, and then use several months afterwards to customize and localize the messaging for other audiences. This was very successful; it enabled us to reduce annoyance to readers by showing them fewer banners, while still growing revenues. In the future, therefore, we will aim to fundraise more consistently throughout the year, rather than focusing all our energies on a single end-of-year push.

How much did the Wikimedia Foundation staff grow in 2012-13?

We anticipate a 2012-13 year-end projected staff headcount of 167, compared with a planned end-of-year headcount of 174. The end-of-year headcount represents an increase over 2011-12 of 40%, and is 4% below plan.

What's the total budget in this year's annual plan and how does it compare with previous years?

The total operating budget for the 2013-14 plan calls for $50.1 million in spending, including $8 million in spending allocated for grants. In comparison, 2012-13 projected spending is $38.5 million. In general, the Wikimedia movement’s spending has increased every year, as the projects, the organizations supporting them, and readership, have grown.

What are the main increases in spending for 2013-14?

The total increase in spending in 2013-14 compared with 2012-13 is $11.6 million or an increase of 30%. The single largest increase in spending on a dollar basis is $2.2 million in Technical Operations, which includes one time expenditures for transition of the data centers. On a percentage basis, the largest increase within Engineering is a 92% increase with the formation of an Analytics team within Engineering. The second-largest increase is in Grantmaking: we are adding an additional $1.7 million in grants money for the Wikimedia movement in 2013-14.

The projected budget for the 2012-13 annual plan was $42.1 million: what were the actuals?

Fiscal year 2012-13 results won't be final until end of July 2013, but we are projecting to spend $38.5 million in the operating budget (this does not include things like depreciation). When the audited financial statements are available in fall of 2013, the total expenses reflected there will be higher because they will reflect items such as depreciation which we don't include in plan or projections.

Why is 2012-13's projected spending lower than plan?

Spending was lower than plan because of delays in hiring and the FDC not awarding the full FDC grants budget. In addition, we had lower than budgeted cost in Technical Operation with reduced bandwidth cost. For more detail see page 15 of the Annual Plan.

What's the revenue target for 2013-14, and how does it compare to previous years?

The 2013-14 plans for revenue of $50.1 million, a 2% decrease over projected revenue of $50.9 million for 2012-13. As we raised the reserve, in the prior fiscal year, there was no need to increase revenue beyond our 2013-14 projections. We don’t try to make as much money as we possibly can: our general practice is to raise the money the movement needs to do its work and to fund a reasonable reserve.

Which movement groups will participate in the 2013 annual fundraiser, and what will happen to the money they raise?

At this point, it looks like Wikimedia Germany and Switzerland will act as payment processors during the 2013 campaign. As per the Board’s resolution, all funds raised via the Wikimedia project sites would thereafter be distributed via the recommendations of the FDC, with the exception of Wikimedia Foundation expenses and the Wikimedia Foundation reserve.

What is proposed to happen to the Wikimedia Foundation reserve in 2013-14?

In 2013-14, the Wikimedia Foundation does not plan on growing the reserve. This is due to the total reserve amount planned for 2013-14 having been raised in 2012-13.

It’s worth noting that the WMF has consistently, without exception, over-achieved its annual revenue targets. That means that every year, the WMF has ended the year making a larger contribution to the reserve than was planned for. It is fairly likely we will exceed our planned contribution to the reserve in 2013-14, as well.

What is the thinking behind the reserve in 2013-14?

It is normal for organizations to plan to have reserve or contingency funds. Reserve funds are critical for an organization in the event of unplanned expenses, emergencies and/or revenue shortfalls.There is a wide range of opinions about what size of reserve fund a healthy non-profit needs, but a best practice is typically believed to be somewhere between three and twelve months of average monthly spending.

The Board of Trustees has established a rule of thumb that it would like the WMF reserve to never drop below six months of total spending. The 2013-14 plan therefore calls for the reserve to stay at a minimum of six months of total spending throughout the year.

How many people are you planning to hire?

We plan to grow the Wikimedia Foundation staff from 167 to 192, an increase of 15% over the prior fiscal year.

What are the positions you will be hiring for, and what is the general thinking behind it?

The biggest increase in staffing is Engineering staff, which will grow from 96 to 115 people according to plan. Those new hires will support our key activities: feature development including features focused on editor retention, mobile, and the Visual Editor. This will indeed continue to be a stretch for 2013-14, because there is currently a major shortage of technical talent in the San Francisco Bay Area. Even so, we feel like we're in a pretty good position to hire technology staff right now. We hire staff around the world, not just in the Bay Area. In 2013-14, we will be continuing dedicating resources towards technical recruitment. And we are very clear about our value proposition: the Wikimedia Foundation is doing important work to which individual staff members can make an important contribution; we don’t need to radically shift engineering priorities based on financial considerations, and we’re a financially stable, enjoyable place to work. We offer a fair, friendly, fun environment for talented engineers who want to make the world a better place for the half-a-billion readers of the Wikimedia projects.

Will all the jobs be advertised publicly?

Yes. Our general practice, with rare exceptions, is to advertise all jobs on the Wikimedia Foundation website, as well as on relevant job sites. In some cases, we may decide not to post individual positions, but rather to announce general availability of vacancies in a certain area.

When do you expect to stop growing? In other words, how big do you plan to get, in terms of staff headcount?

In this plan, we are slowing the pace of growth from a projected 40% in 2012-13 to 15% in the 2013-14 plan. It’s a balancing act. We want the organization to have sufficient resources to get its work done, and we have lots of important work to do. And over the past several years we’ve developed the internal capacity to hire well, and reasonably quickly. But, each new staff person also requires significant effort from HR and from that person’s manager and colleagues, to recruit and onboard and acclimate – effort that detracts from other work. And, the Wikimedia Foundation is an organization that’s learning quickly, and however talented and smart they are, new people have some degree of inherent “resetting” effect on the organization overall. We are beginning to feel the need to rebalance our efforts away from “fast growth” and towards a focus on consolidation and execution.

How is growth changing the Wikimedia Foundation?

Our growth is slowing as we shift focus from fast growth towards consolidation and execution. In 2013-14 there will be very little staff growth at the Wikimedia Foundation, with the exception of Engineering.

What is included in the “Management and Governance” spending in the Annual Plan?

In 2012-13, spending for Management and Governance spending is projected to have been $769K: it will stay the same in 2013-14. Management and Governance includes costs for the Board and the Advisory Board; including the costs of face-to-face Board meetings, other travel costs (e.g., attendance at Wikimedia conferences and other events), an allocation for board development, as well as salaries for the office of the Executive Director and expenses for consultants and contractors supporting Board work.

What is included in the “Engineering” spending in the Annual Plan?

In 2012-13, Engineering spending is projected to have been $15.3 million; in 2013-14, it is planned to be $20.9 million. This includes bandwidth and hardware costs, salaries for the Engineering and Product Development staff, costs for technical contractors and consultants, as well as other miscellaneous costs. Please refer to page 15 of the Annual Plan for more detail.

What is included in the “Fundraising” spending in the Annual Plan?

In 2012-13, Fundraising spending is projected to have been $3.4 million; in 2013-14, it is planned to be $4.6 million. This includes payment processing fees, salaries for fundraising staff, consultant and contractor costs, and other miscellaneous fundraising expenses.

What is included in the “Legal, Community Advocacy, Communications, Human Resources, Finance and Administration” spending in the Annual Plan?

In 2012-13, Legal, Human Resources, Finance and Administration spending is projected to be $9.1 million; in 2013-14, it is planned to be $11.0 million. This includes the staff for legal, community advocacy, communications, HR, finance and accounting, office administration, office IT support, legal fees, and expenses for consultants and contractors. It also includes general operating expenses such as rent and other facilities costs, some staff development and staff meeting expenses, recruiting expenses, fees for the annual audit, and other miscellaneous costs.

What is included in Grants?

This is the amount that is projected as being given out in grants to the Wikimedia movement. In 2012-13, Grants spending is projected to be $6.1 million; in 2013-14, it is planned to be up to $8 million. This includes funding for all the grant programs of the Wikimedia Foundation. It does not include the administration cost of the grants process.

What is included in Grantmaking?

Grantmaking is the operational budget for the Grantmaking department. In 2012-13, Grantmaking spending is projected to be $1.9 million; in 2013-14, it is planned to be $2.2 million. This includes funding for the staffing for all the Wikimedia grants programs, Wikimania support, and grants evaluation, as well as the administrative costs to support our volunteer committees, including the meetings of the FDC.

What is included in Program Development?

In 2012-13, Program Development is projected to spend $1.6 million; in 2013-14 it is planned to spend $2.3 million. This includes all expenses for Program Evaluation and Design, the Global Education Program and Wikipedia Zero.

What are the biggest risks of this plan, and how will you mitigate against them?

A detailed risk assessment can be found beginning on page 23 of the Annual Plan.